By Catherine Tymkiw, Crain's New York Business

WXRK-FM left in the lurch by Stern move

With Howard Stern looking forward to unbridled free speech when he jumps to Sirius Satellite Radio from Infinity in 2006, industry experts say his home base of WXRK-FM could be forced into making a format change.

WXRK-FM, with its classic-rock format, has struggled to win daytime listeners, even with the shock jock in the morning time slot. "K-Rock is all Howard," said Robert Unmacht, a partner in media consulting firm iN3partners, who notes that Stern's loyal audience of 18-to-49-year-old males is "too broad [in terms of musical tastes] to find a good complementary format." He notes that the racy show gives K-Rock an 8%-9% share of morning listeners, while its audience share for the rest of the day drops to about 1%-2%. He suggests the station could "make the music the star rather than Howard," with a change in format to aggressive modern rock or country.

Mr. Stern, whose contract with Infinity ends at the end of 2005, signed a five-year, multimillion-dollar deal with Manhattan-based Sirius, which as a satellite radio broadcaster is not subject to the federal indecency rules that have caused so much trouble for Mr. Stern's employer even as they boosted the shock jock's ratings. Mr. Stern said on his show today that he will have three channels, which he will program himself. Sirius, which has 120 channels, has more than 600,000 subscribers and says it needs to bump subscribership up to about 1 million to cover the costs of the costly contract. Total production and operating costs for The Howard Stern Show, including Mr. Stern's salary, are estimated at about $100 million per year, Sirius said in a statement.

Shares of Sirius surged as much as 28%, to $4.29, in early trading Wednesday. They closed up 15.5%, at $3.87. Viacom's stock edged up 0.8%, despite the loss to the radio unit. Though investors shrugged off the news, Mr. Stern's defection raises questions about Infinity's future. In June, Mel Karmazin resigned as president and chief operating officer of Viacom, sparking speculation that the radio division, the unit most identified with him, would be sold off. Viacom Chairman Sumner Redstone snuffed that talk, but it is well known in the industry that he does not smile on the division, despite the annual $1 billion in cash flow it generates for the company. Infinity's operating income fell 3% in 2003, to $975 million. Income for the cable networks, by comparison, grew 23% last year, to around $2.2 billion.